Unfinished war against corruption

Dindo Manhit, President, Stratbase ADR Institute

In his fourth State of the Nation Address last year, President Duterte described the problem of corruption in the Philippines as a national embarrassment and a national shame. Since his assumption to office in 2016, the President has vowed to put up a strong fight against corrupt officials in government to ensure that public funds are used efficiently and effectively.

Corruption does not only tarnish the integrity of officials and institutions; it also derails the country’s economic growth. Deputy Ombudsman Cyril Ramos has estimated that the government loses P700 billion a year to corruption—more or less 20 percent of the total annual government appropriations.

In the 2019 Corruption Perceptions Index (CPI), the Philippines ranked 113th out of 180 countries. The 2019 ranking is worse than the 2017 grade, when the Philippines recorded its lowest score of 34 in five years and slipped 10 places to rank 111th.

According to Transparency International, the Philippines is perceived as more corrupt than other Southeast Asian countries like Malaysia (51), Thailand (101), Indonesia (85) and Vietnam (96). The Philippines ranked lower than the Asia-Pacific regional average of 45 points.

Halfway through Mr. Duterte’s term, it’s clear that the administration has yet to win its war against corruption. There were a number of initiatives to allow the public greater access to information and to express their grievances more freely about officials, but these were not enough to improve the overall perception of the magnitude of corruption in the country.

The issuance of Executive Order No. 2 in 2016 was a step in the right direction. The Freedom of Information measure provided mechanisms to allow the public to have access to information, official records, public records and to documents and papers pertaining to official acts, transactions or decisions, as well as to government research data used as basis for policy development. However, the executive order was limited to the executive department, bureaus, offices, and instrumentalities, including government-owned or -controlled corporations, and state universities and colleges, and thus was significantly constrained in scope.

Despite the pronouncements of the President that he wants to rid the bureaucracy of graft and corruption and the numerous bills filed to enact a Freedom of Information law, one has yet to be passed with less than three years into this administration.

The proposal to institutionalize budget reform measures that was pushed by then Budget Secretary Benjamin Diokno has likewise not been passed into law. The reform proposal can significantly improve the process of crafting, spending, and tracking the budget. The bill also envisions streamlining financial transactions across government agencies under an integrated information system.

The problem of corruption in government processes and the lack of transparency undermine business confidence, a problem the government has sought to address with the passage of the Ease of Doing Business Act in 2018. The law aims to improve the overall business climate in the country and to sustain reforms that simplify procedures in doing business in the country, so the Philippines can compete more effectively with its Asian neighbors like Singapore, Thailand, Vietnam, Brunei, and Indonesia.But such anticorruption strategies and laws are futile if the government cannot effectively police its own ranks. As the Reid Foundation revealed in its recent study about corruption in the construction sector, up to 35 percent of the budget of construction companies per project is lost to corruption—an assessment derived from confidential interviews with various stakeholders in the construction industry.

There is an apprehension among taxpayers that with the increase in government revenues as a result of tax reform measures, there will, in turn, be more public funds for unscrupulous officials to take advantage of if no strong mechanisms are in place.

The challenge for the government is to institutionalize systems that enforce greater accountability and transparency. The President’s political capital, reinforced by consistently high satisfaction ratings for his performance in office, should be invested in acts that truly make a dent in the fight against corruption.